India faces severe liquidity crisis.
A 65-year-old man in NOIDA, Uttar Pradesh had to wait a day for performing the last rites of his wife as his bank denied to pay him cash. Munni Lal, a vegetable vendor, finally had to seek the help of media and a politician to get cash from his account.
Hindustan Times reported that Phoolmati, 62, the wife of Munni Lal, died of cancer on Monday. But, when he went to Sector 9 branch of Bank of India (BoI) where he maintains his account he couldn’t withdraw money from as there was a long queue. His request to branch manager to allow him to withdraw money was denied.
“I was waiting in the queue at Bank of India’s Sector 9 branch for over three hours on Monday, but in vain. I requested the bank staff to give me some money from my account to perform the last rites of my wife, but nobody heard my request. They thought that I was lying and said that the bank was closed for the day,” Munni Lal told Hindustan Times.
On Tuesday morning, Lal went to the bank again to see a long queue. Once again the branch manager denied paying money. He had Rupees 15000 in his account.
Left with no option, Lal contacted a local politician and sought the help of his neighbors who contacted media persons. After media persons and local politician asked the bank manager about the incident, finally Lal was paid Rupees 15000 from his account.
“I sought help from my neighbors, one of whom contacted a local politician and also informed the media. About 12.30pm on Tuesday, after media persons and local leaders asked the bank manager about the incident, he called me into his cabin and gave me Rupees 15,000 from my account,” Lal said.
The nation is witnessing unprecedented liquidity crisis as people lined up in front of bank branches to withdraw their salary and pension. Many bank branches closed down as they ran out of cash within hours, while some of them disbursed only Rs 5,000 per person, those with better cash availability could provide Rs 10,000-Rs 12,000 per withdrawal.
In Kerala, 42 of the 157 state treasuries ran dry till afternoon leading to a massive chaos at banks. “Banks do not have the money to disburse. Till now, 42 state treasuries are unable to disburse money as cash did not arrive,” said Kerala’s Finance Minister Thomas Issac.
Incidents of violence reported in Meerut, and where an effigy of Prime Minister Narendra Modi was torched. People struggled to withdraw money in almost all states.
While the common people are reeling under the after-effects of demonetization, the Central Government used about Rupees 41700 crore to pay its 42 lakh Group C and D employees Rs 10,000 each in cash, reported India Today. Had this money been used to feed 1.66 lakh ATMs 82 percent of India’s total cash machines, it could have benefited over 1.6 crore people (assuming the Rs 2,500 withdrawal limit per day).
Finance Minister Arun Jaitley said that the inconvenience caused to the people as a result of currency ban wouldn’t last long. “The effect of demonetization will remain for one or two quarters, but its effect on the economy will be seen in the long-term,” said the Finance Minister on the sidelines of ‘Made in Odisha’ conclave.